Rogers Communications Inc names Vodafone UK chief as new CEO

As Guy Laurence prepares to take charge at Rogers Communications Inc., the company’s board hopes the outsider can tackle sticking points like its troublesome customer turnover problem and guide it through next year’s crucial public auction of wireless airwaves.

The current chief executive of Vodafone Group Plc’s United Kingdom business will take over from outgoing CEO Nadir Mohamed on Dec. 2, exactly five years after the death of Ted Rogers Jr., the company said Thursday.

Analysts said Mr. Laurence’s experience turning around the U.K. wireless and wireline telephone business, which he has led as CEO since 2008, would be an asset to Canada’s largest cellular provider as subscriber churn rates are a quarterly headache.

Laurence is known for his turnaround of Vodafone UK involving both aggressive cost cuts and culture change

Mr. Laurence praised Rogers’ outgoing CEO’s past leadership in a statement Thursday, saying the company is well-positioned to compete against rivals Telus Corp. and BCE Inc., which continue to win wireless market share.

“Its unique mix of wireless, cable and media assets offer a brilliant platform to provide innovative service to Canadians. I intend to build on the strong foundation established under Nadir’s leadership to compete and win in the market,” he said.

Rogers board member John Tory, the Toronto-based radio host and former head of the company’s cable division, acknowledged that customer service is an issue for the company – as it is for most large businesses, he added.

Related

“People who have millions of customers have millions of opportunities to make mistakes and the challenge is how do you address them with more effective plans and with better training and so on,” Mr. Tory said in an interview. “[Mr. Laurence] is certainly a person who’s steeped in that and I think he will take up that challenge as an important part of his job.”

“Mr. Laurence is known for his turnaround of Vodafone UK involving both aggressive cost cuts and culture change toward more customer service focus,” Macquarie Capital Markets analyst Greg MacDonald said in a research note, adding that experience will be a positive as the appetite for smartphone upgrades in Canada begins to mature.

Dvai Ghose, head of research at Canaccord Genuity, said in a note to clients he will be watching for Mr. Laurence to make moves on pricing, noting that he believes Rogers has been too aggressive with wireless promotions this year, “especially as such promotions do not tackle Rogers Wireless’ real challenge which seems to be churn and customer satisfaction.”

Mr. Tory said the board unanimously chose Mr. Laurence for the job, adding that his extensive resume made him attractive. Prior to joining Vodafone in 2000 and going on to lead its Netherlands division before taking the UK job in 2008, he was a media executive, holding senior positions with MGM Studios, United Cinemas and Chrysalis Records.

“It was another attractive feature about him,” Mr. Tory said. “He was not just a media guy or not just a wireless guy. He had this breadth of experience in different parts of these businesses.”

Mr. Laurence will soon have to contend with how to effectively manage Rogers’ media assets, which are extensive and include television and radio properties as well as ownership of the Toronto Blue Jays and part of the Toronto Maple Leafs.

However, despite its presence as one of the largest vertically integrated companies in Canada, just 13% of Rogers’ $12.5-billion in annual revenue in 2012 came from its media division and the company has admitted that declining advertising sales holds the business back from improved growth.

“Mr. Laurence’s understanding of media and how it may integrate with the cable and wireless businesses will only grow in importance given the move toward over-the-top services,” Mr. MacDonald noted, referencing Netflix-like alternatives challenging the traditional broadcast model.

Edward Rogers III lobbied for the job in 2009 after his father’s death but both he and his sister Melinda Rogers said in February they would not put their names forth for consideration this time.

Mr. Tory said the family, which controls the company through their Class-A preferred stock, is supportive of Mr. Laurence’s appointment. “I’m sure it’s going to work fine.”

Mr. Ghose said the move clears up lingering uncertainty and suggested the appointment of an executive with “a ton of experience who is hopefully in it for the longer term” would be a positive for investors.

Rogers’ shares did not move much on the news Thursday morning, although its stock closed down 1.15% or $0.50 at $42.95. That was largely in reaction to a midday report on the Business News Network that other large foreign companies, apart from Verizon Communications Inc., have taken a look at participating in Canada’s spectrum auction.

The incoming CEO will face several challenges when he arrives, one of the first being leading the company through January’s public auction for wireless spectrum in the 700-megahertz frequency.

The auction is viewed as crucial for Canada’s mobile carriers and was the subject of much debate over the summer as Rogers, BCE and Telus scrapped with the federal government over its policies on the sector.

Mr. Laurence has already established a reputation as an unorthodox leader and in 2011 he told UK newspaper The Telegraph, “I don’t believe in offices. They’re a thing of the past. Offices produce things like a conventional company.”

He said executives at the Vodafone UK campus in the city of Newbury don’t have their own desks or landline telephones and instead take their cellphones and laptop computers with them as roving mobile offices.

Any personal items left on desks overnight were “incinerated,” paper use was frowned upon and staff were told to eschew formal office wear and dress as their customers would.

“This is what I believe in,” Mr. Laurence told The Telegraph. “You’re talking about my soul here. This is not a little project. It’s a fundamentally different way of working.”

He streamlined the company’s workforce to 7,150 in 2011, down from 9,500 at the time of his appointment, The Telegraph reported.

“When you remove the barriers of offices, meetings and all the rest of it, people can spend more time doing what they’re supposed to do,” Mr. Laurence said. “As a consequence, people start to perform better. It used to take us 90 days to do a pricing change. We do that in four days now.”

Almost Done!

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.

Postmedia wants to improve your reading experience as well as share the best deals and promotions from our advertisers with you. The information below will be used to optimize the content and make ads across the network more relevant to you. You can always change the information you share with us by editing your profile.

By clicking "Create Account", I hearby grant permission to Postmedia to use my account information to create my account.

I also accept and agree to be bound by Postmedia's Terms and Conditions with respect to my use of the Site and I have read and understand Postmedia's Privacy Statement. I consent to the collection, use, maintenance, and disclosure of my information in accordance with the Postmedia's Privacy Policy.